A District Court Must Provide An Adequate Reason For Its Denial Of A Preliminary Injunction Motion

The district court stayed the entire infringement litigation—involving a total of five asserted patents—in light of the pending inter partes review of the three originally asserted patents. After the PTAB instituted the review of the original patents, plaintiff moved to lift the stay only as to the two later-asserted patents and moved for a preliminary injunction based on the infringement of the two later-asserted patents. The district court did not lift the stay, due to the burden of litigation on the court and the parties, when considering the traditional three-factor stay test. Further, the district court held that “[b]ecause the court has now declined to lift the stay, the Motion for Preliminary Injunction is denied without prejudice to renew at a later date, if appropriate.”

On appeal, the Federal Circuit affirmed the district court’s decision not to lift the stay. It reasoned that “[a]ttendant to the district court’s inherent power to stay proceedings is the court’s discretionary prerogative to balance considerations beyond those captured by the three-factor stay test. The burden litigation places on the court and the parties when IPR proceedings loom, is one such consideration that district courts may rightfully choose to weigh.” But the Federal Circuit vacated the district court’s denial of the plaintiff’s motion for a preliminary injunction. The Federal Circuit reasoned that in “the absence of any analysis whatsoever, [the Federal Circuit] cannot review the opinion for an abuse of discretion.” Accordingly, the Federal Circuit held that "when a district court denies a preliminary injunction motion, it must provide an adequate reason for its decision beyond merely noting that the case has been stayed.”

Murata Mach. USA v. Daifuku Co., Case Nos. 2015-2094 (August 1, 2016); Opinion by: Stoll, joined by Reyna and Chen; Appealed From: United States District Court for the District of Utah, Kimball, J. Read the full opinion here.